New York’s housing crisis and the approaching 2024 budget deadline

Four weeks to go until the New York state budget deadline and the question on everyone’s mind, is will we get a housing package?

A budget deal is New York's best shot at securing new housing legislation in 2024. 

But lawmakers and the governor remain at odds over a host of issues, and it's unclear if they're willing to set aside their differences in the interest of the greater good. 

Jay Martin explains the situation, the stakes, and a whole lot more in this very first episode of Housing New York.

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Transcript

 Less than a month to go until the New York State budget deadline, and the question on everyone's mind is if we will actually get a housing package. A budget deal is the best shot we've got at securing any new housing legislation this year, but lawmakers and the governor remain at odds over a host of issues.

It's a critical time for New York housing. So let's start Housing New York.  We declared a housing emergency over 50 years ago. We need 800, 000 units to meet the demand today. What we have right now in the United States and what we have right now in New York City is almost a crisis of absurdity. We have to figure out a way to get these vacant units back online in a reasonable way that sets a rent that's affordable for most people, and if it isn't We hear from New Yorkers all the time, housing, housing, housing  Welcome to the very first episode of Housing New York.

I'm your host, Jay Martin. Join us each week for analysis of all the news you need to know about New York City's ongoing housing crisis. We'll shed light on the politics and the public policy shaping the future of New York City housing.  It's a crisis more than six decades in the making, and recent surveys suggest there's less available housing stock now than at any time since the 1960s.

The reasons behind the crisis are complex and defy simple narratives, but as with so much else in life, a lot of it boils down to politics. Luckily, I know a little bit about that. I worked in the State Senate for more than a decade, and now I lead the Community Housing Improvement Program, where we advocate for smarter housing policies.

That will help all New Yorkers. As you might guess, clever politics and good government policy often end up in conflict. We're trying to change that.  It's Monday, March 4th. So let's recap last week's top stories and stick around because after the news, I'll give you my thoughts on our current housing situation and what you need to know going into the week. 

So the first group of stories we're going to cover is mostly focusing on what's going on upstate and Albany. Uh, what our lawmakers are discussing. First one is from the real deal. Senator Salazar was quoted in an article that you'd be willing to quote unquote negotiate on the rent limit in good cause.

I think this is a good example of, you know, where lawmakers are. Um, she has been obviously an ardent supporter of good cause. She's not a big supporter of 421 a. Um, obviously most of the socialists are not, but she highlights that the detail is subject to negotiations and is important that the integrity of the bill is maintained on her good cause proposal.

So I think you're seeing all the pressure building up from years of not really anything getting done on housing that even some of the more radical Um, Supporters of positions like Good Cause and opposition to 421 A is starting to get to a place where everyone's ready to make a deal.  In other news, Gothamist had a piece that we were frustrated with.

We went back and forth with a reporter, David Brand, who's an excellent reporter, but he's getting bad information from HPD, unfortunately, because HPD keeps putting out this. Talking point that there are no available affordable units and rent stabilized housing. Uh, and the article's title was New York city landlords keep fewer stabilized apartments vacant than you think.

So they're basing that off the housing vacancy survey. The housing vacancy survey does not even count the amount of unavailable rent stabilized apartments towards the vacancy number. They only count the amount of available apartments. And that amount is very small. There's only about 2, 400 available apartments in 2021. 

Um, and now they're saying that number in 2023, which is one year delayed from 2024 now, is virtually zero. And we agree. The amount of available rent stabilized apartments is virtually zero, but the amount of unavailable rent stabilized apartments, that's the true vacancy number that we're constantly referring to.

When we talk about the need to fix HSTPA and the rent stabilization system is 26, 000 or more, and that's highlighted in the HVS. So HPD continues to, for whatever reason, highlight this number of available units, which kind of gives the impression that. Well, there's no vacancies. We're not sure why they keep doing this.

We've worked with DHR and other agencies. The department of finance has put out numbers that kind of confirms in and around 18, 000 or more. We believe it's as high as 26, 000 or more based off the HVS.  This is a little bit of a floating number, but the bottom line is there are tens of thousands of vacant units of housing and rent stabilized apartments, and they are unavailable.

That's an important distinction to keep in mind when you hear agencies talking about unavailable to available. That difference is significant, and that is the difference between No apartments and tens of thousands of apartments. There's a listing that I highlighted on my Twitter account that shows this problem.

There is an apartment building for sale right in the center of Manhattan. 40 units, nine are vacant.  HPD would look at that and say there's no available apartments, therefore it's zero. HVS survey looks at that building and says there's nine unavailable apartments. That's the difference. So it's a really small distinction, but it's an important one when you're trying to figure out the total number of unavailable vacant rent stabilized apartments in the city of New York. 

Senator Kavanaugh was on Spectrum News, went over a few points, priorities coming up. He's been pretty clear that there is going to be a need for a grand deal coming up this legislative session. I think he's been a good leader on this issue. We've enjoyed working with Senator Kavanaugh on some things, disagreed with him on others. 

His quote is saying we need to put provisions in place that will increase supply, but you won't see a major shift. It's still going to be a while before the effects, the basic supply and demand, which is why we need tenant protections.  That's a continued talking point from some lawmakers. The problem with that theory is that we've seen rent stabilization in New York for 70 years, 60 plus years. 

And we know as long as there is a regulation system to cap rents, lawmakers will continue to push. That system and say, that is your affordability instead of doing what they really need to be doing, which is incentivizing changing zoning laws and building enough housing to provide affordability. Uh, we saw during COVID when a massive amount of people moved out of the city, vacancies went up, rents plummeted.

20 30 percent in some neighborhoods.  We know that that's the best way to provide affordability, not regulation. So as long as lawmakers continue to rely on regulations, quote unquote, under the auspices of tenant protections,  it will be difficult for some of them to divorce that from the idea that we have to build enough supply to provide affordability. 

The city had Pretty good article from Greg David, who's really good on kind of explaining some of these more difficult policy points and around  New York City housing on how New York's could cause eviction bill breaks down from other states highlighted the significant differences. The New York law has between New Jersey, for example, and the proposal here in New York. 

The New York law has strict rent caps. The New Jersey law does not. There are unconscionable and unreasonable language differences between the two laws. C. L. Weaver was quoted in this article saying that it's absolutely necessary to have the mandate of continuing lease renewal. The owner should have to go to court to prove why there isn't a reason for a lease renewal.

I think the main problem that many property owners have faced when talking about this is that it has been couched by tenant groups. As rent control.  And I think, you know, when looking at policies in California, which has functioned under a version of good cause, for lack of a better term, for a while, New Jersey under a much less restrictive version of good cause.

Uh, and this article highlights this is that, you know, it is possible to manage housing, but if there's no Conversation about the true cost and the need to incentivize creation. And if it's being sold as like a cure all for all affordability, which it is often done here in New York, then property owners will immediately be concerned, um, about their ability to cover operating costs.

And I think that's primarily what's controlled the debate here in New York.  In other news, the real deal had an article citing left racks nightmarish delays and taking housing court. to court. They are launching a lawsuit because they're dealing with unprecedented delays in housing court. And this is something our organization has been dealing with property owners going on four years now.

Almost were looking at cases that take eight months, 12 months for simple non payment cases. The complaint says landlords have been forced To merely accept the game as rigged and trudge along the nightmarish procedure of housing court in the hopes that one day far in the future, they will be able to retake and make their property economically viable.

Once more, I think it's important that it said that most property owners are not attempting to actually regain possession of units. They are at the end of the day, trying to run a business and that business requires a rent. to cover the operating costs of each individual unit. And when housing court doesn't work, that really stops the process of being able to make their bills.

It's especially hard on smaller operators and smaller property owners. LEFRAC obviously is very large and they've jumped into the argument here to kind of carry the flag on behalf of the industry. But you're going to see smaller operators jump into this. And again, the housing court is a means to kind of adjudicate non payment proceedings.

There's no reason we can't figure out a way to help keep renters in place, help get their arrears paid through HPD and HRA and other different organizations and make sure that housing is paid for and people don't lose their homes. But the first start of that is acknowledging there's a problem and housing court is a problem, right? 

So staying in Queens, the Queens couple has, uh, dealing with a nightmare. They bought a 2 million dream home to care for a disabled son. The post highlighted this and, uh, there was a squatter living inside. Basically, Susanna and Joseph Landa, both 68 years old, purchased a home next to family members in the neighborhood of Douglaston,  only to find out that there was a squatter living inside.

That squatter forged documents from the prior owner saying that they had a lease to live in the building, a license, quote unquote, and they've been subletting and renting out rooms in this Multi million dollar home and the people who purchased the home who want to live there are unable to get in.

Unfortunately, the squatter situation is getting out of control and this is kind of the opposite effect of what happens when tenant protections go too far and when housing court simply doesn't work. There needs to be a balance always. If people aren't buying homes and investing in properties because they think anyone can just squat in a unit of housing or in a home, that's bad overall for housing and people who want to make housing better in New York.

Obviously, the court system in this case, and in many cases, quote unquote, uh, said in the article, it's unlawful for any person to evict or attempt to evict an occupant of a dwelling unit. who has lawfully occupied the dwelling unit for 30 consecutive days. And because the squatter has been there for more than 30 days, the court has let them stay there.

So, hopefully these people are able to get some relief in the court, but imagine buying a home for 2 million and then you can't even occupy it because somebody is just sitting in there. It's crazy.  You know, back on the state level. One of the things that we've been advocating for is a solution to things like squatting and the housing court system is a right to counsel. 

I know that may seem contradictory, but it's really important. I think that you understand that property owners actually want tenants to have counsel. Property owners in some cases, smaller property owners who can't afford to keep going back to court over and over again, should have the right to counsel as well.

Uh, there should be a system in place to make sure everybody's represented. Oftentimes, the cases go much quicker and more smoothly when both sides are represented by counsel. So, we have put out a press release, um, this Monday actually that we support. statewide right to council system. But any right to council system has to be funded.

And I think that's been the biggest obstacle here in New York City. We're seeing legal groups that represent tenants are petitioning and picketing, frankly, for higher wages. They're overworked, they're understaffed and the council city council that is and the state have not allocated enough funds to make these effective programs and enough funding.

If you're going to have a right to council is necessary. Um, we also believe in a diversion program. I think that's absolutely necessary to make sure that people are getting the support they need before they even have to go to court. If in many cases we're dealing with situations where basically somebody just owes rent money, there's no reason we can't deal with that before we even have to go into court, clog up the court system, spend thousands of more dollars on attorneys when we're at the end of the day, just dealing with a late payment. 

One of the bigger stories last week in housing, uh, came from a New York Times article about is your landlord overcharging you? There was a TikTok from a woman named Karla Badami, 28 years old, who walked through the steps of getting 6, 000 in back rent from her property owner. And then that was highlighted by an organization called Open Igloo.

The tracking service, so you can basically rate your property owner and whether or not they're good or bad. And it highlighted the way you can actually request rent stabilized rent histories through DHCR.  And all this recent press around requesting the rent histories has crashed the DHCR system.  It's something we've done in our organization, we actually refer people to in ways that they can check their rent histories.

Obviously we deal with property owners who are dealing with their rent histories all the time. But it kind of highlights the Issue with rent stabilization as a whole, there is no digital system for the rent stabilization system for tracking rents decades over time. If you buy a building in the last five years, you're inheriting the paperwork and rent histories from the last property owner and maybe the last two, three, four or five property owners.

And if they haven't kept meticulous records and accurate rent histories, you're now liable. For every potential mistake that they have ever made on the rent histories. That's a significant problem because if property owners don't know the best way and the most accurate way to set rents, that's opening them up for liabilities, but it also could lead to overcharge complaints like we're seeing.

So we fully support a way to figure out. It was 21st century. We've got to make this system catch up to the future. Make sure that there's a through line of accurate rent histories going back on all these apartments so that we can keep a system that's trustworthy for both property owners and renters alike.

Now to the funny pages, actually, I'm sorry. No, we're still in talking about housing. Uh, how much does it cost NYCHA to replace a light bulb? 708 in one case, uh, Greg Smith, who's like one of the best housing investigative reporters in the state, um, looked into how much NYCHA is overcharging the city and state, in one case, more than 708 per bulb.

And this is, you know, an issue we've tried to highlight. Right now, NYCHA spends about 400, 000 to renovate one unit of housing and property owners are allowed 15, 000.  The average cost for a private owner to renovate a rent stabilized apartment is about 100, 000 or more, but it's still significantly less.

One fourth the cost of a nature complex. And our buildings are about 30 to 50 years older on average. So the issue we believe is property owners is This idea that private property owners have to provide better quality housing at a much cheaper price while public housing is allowed to provide a worse quality product at a much higher price.

And then we're told by certain lawmakers that this is the solution to have more public housing, to have more Money billions of dollars thrown at agencies that are spending 708 per bulb. It doesn't make any sense. We think there's better ways. There's more efficient ways. Letting, uh, private property owners spend money, recoup the money will actually help keep rents in line.

And also, cracking down on agencies that are spending taxpayer dollars at ridiculous sums for housing that isn't good for the people who live in it. If you care about NYCHA tenants, you want them to have good quality housing. Just throwing money at the problem has been the policy for years, and we need to fix that. 

So one of the things that happened this past week that Eddie Small highlighted in Cranes that we're very proud of is a seldom used tax break that allows a property owner to add a child care center to their building. And as a result, they get a trade off and a tax credit. And one of our owners took advantage of it and Cranes highlighted it in an article to get the word out.

We know child care is a huge cost to people here in New York. We know there aren't enough child care facilities. We know they're often not in the neighborhoods of need. This is a win win policy. It allows property owners to add child care facilities to their buildings and offset some of their tax burden.

Unfortunately, the city does. Rather poor job of letting building owners know that this exists. And we're hopeful that more people will take advantage of this so we can build more childcare centers and we can get more folks tax benefits that will actually lead to helping two problems.  So that's a wrap on this week's news.

Now for some final thoughts in a segment, we're going to call what you need to know, where I'm going to break down a specific part of the news that we talked about. Um, the first story we went over is how Senator Salazar was willing to negotiate on good cause. And I think, you know, her position. And she's often framed as a radical and she is to many people's opinion.

I think she'd be the first to say that  but her position is a good one And it's a good one for I think new york leaders Good one for new york property owners  developers rent stabilized property owners and politicians to keep in mind Because  as we see in DC, what happens when people aren't willing to compromise and come together on solutions, you have gridlock.

You have the most unproductive Congress in decades. You have a lot of needs. You have people putting politics over legislating and not a lot of solutions coming out of Washington right now. And what we're dealing with here in New York is a real crisis. The housing crisis is only getting worse. There is such a tremendous need to deal with affordability.

There's no one who's denying that housing is expensive in New York.  We can debate about where the cost comes from, what drives up the cost of housing.  Uh, it's a lot deeper than just capping the rent. What goes into getting the rent that high is something we really need to tackle. Hopefully we'll tackle in future podcasts, specifically in and around the property tax question.

But Senator Salazar for all her negatives is right in that we have to be in a position to negotiate.  People have to be willing to give to get,  and I'm concerned that we're going into get another budget session where everyone is staking out their positions, not willing to have a conversation about what's the best for.

New York renters and those who live in the state.  As we sit now, about five weeks out from the budget, it's still 50 50. If you ask people in Albany whether or not a budget is actually going to happen. So what you need to know is that  even with all the pressure for housing to get done, even with all the debate, it's still very unclear at this point whether or not actually something substantive will get pushed through the legislature in the next few weeks.

We're hopeful. But not optimistic. 

We really appreciate you listening to our first show. Uh, each week we'll strive to provide the most up to date information and the nuanced perspectives you need to engage with the world of New York housing.  It doesn't matter if you're a property owner, a tenant, a politician, or an everyday working New Yorker, we all call New York City home, and it's going to take all of us working together to solve this crisis.

Thanks so much and take care.